Popular Strikes Deal to Liquidate Bad Loans

Popular (BPOP) has struck a deal to shed troubled loans from its balance sheet.

The $36.5 billion-asset parent of Banco Popular de Puerto Rico said Friday it would sell nonperforming commercial and construction loans for $347 million to a group of investors that includes Perella Weinberg Partners.

Popular will receive $112 million for the portfolio, which has a book value of $568 million. As part of the deal, Popular will retain a 24.9% interest in the acquiring company and extend roughly $268 million in financing to cover a portion of the purchase price, working capital and other expenses.

The deal is expected to slash the Popular's non-performing assets by roughly 28%.

"This transaction will substantially de-risk our balance sheet and improve future profitability," Richard Carrión, Popular's chief executive, said in a press release.

Goldman Sachs and the law firms of Mayer Brown and Pietdrantoni Mendez & Alvarez advised Popular on the deal.

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Consumer banking M&A
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